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The Wall Street Journal<
http://s.wsj.net/img/wsj_print.gif>
* April 26, 2013, 7:42 p.m. ET
The Diploma's Vanishing Value
Bachelor's degrees may not be worth it, but community college can bring a
strong return
By JEFFREY J. SELINGO <
https://gsumail.gram.edu/search/term.html?KEYWORDS=JEFFREY+J.+SELINGO&bylinesearch=true
>
May 1 is fast approaching, and with it the deadline for high-school seniors
to commit to a college. At kitchen tables across the country, anxious
students and their parents are asking: Does it really matter where I go to
school?
When it comes to lifetime earnings, we've been told, a bachelor's degree
pays off six times more than a high-school diploma. The credential is all
that matters, not where it's from-a view now widely accepted. That's one
reason why college enrollment jumped by a third last decade and why
for-profit schools that make getting a diploma ultra convenient now enroll
1 in 10 college students. But is it true that all colleges sprinkle their
graduates with the same magic dust?
With unemployment among college graduates at historic highs and outstanding
student-loan debt at $1 trillion, the question families should be asking is
whether it's worth borrowing tens of thousands of dollars for a degree from
Podunk U. if it's just a ticket to a barista's job at Starbucks. When it
comes to calculating the return on your investment, where you go to school
does matter to your bank account later in life.
Not surprisingly, research has found that a degree from a name-brand elite
college, whether it's Harvard, Stanford or Amherst, carries a premium for
earnings. But the 50 wealthiest and most selective colleges and
universities in the U.S. enroll less than 4% of students. For everyone
else, the statistics show that choosing just any college, at any cost for a
credential, may no longer be worth it.
In a few states, including Arkansas, Colorado, Tennessee, Texas and
Virginia, families can now compare colleges, and even majors, based on the
actual first-year earnings of graduates of in-state schools. (Go to
http://collegemeasures.org/esm/.) <
http://collegemeasures.org/esm/)> The
salaries come from the states' unemployment-insurance programs, which
collect earnings information from employers every quarter. Using Social
Security numbers, the states then match the information to college
graduates. (One limit of this method: The data don't include graduates who
leave the state or are self-employed.)
Think a community-college degree is worth less than a credential from a
four-year college? In Tennessee, the average first-year salaries of
graduates with a two-year degree are $1,000 higher than those with a
bachelor's degree. Technical degree holders from the state's community
colleges often earn more their first year out than those who studied the
same field at a four-year university.
Take graduates in health professions from Dyersburg State Community
College. They not only finish two years earlier than their counterparts at
the University of Tennessee at Knoxville, but they also earn $5,300 more,
on average, in their first year after graduation.
In Virginia, graduates with technical degrees from community colleges make
$20,000 more in the first year after college than do graduates in several
fields who get bachelor's degrees. Yet high-school seniors are regularly
told that community colleges are for students who can't hack it on a
four-year campus.
That's how Tom Carey landed at Radford University in Virginia as a business
major, though his real love was working on cars. "There was definitely
pressure" to go to a four-year school, he told me. "I had no interest in
whatever degree I was getting at Radford."
After two years, Mr. Carey, who is from Reston, transferred to be closer to
home and enrolled in the automotive-technology program at Northern Virginia
Community College. He is now working at a Cadillac dealership and outearns
business graduates from Radford's undergraduate program by several thousand
dollars. That small difference grows considerably when you take into
account that a community-college degree is a fraction of the cost of a
bachelor's degree and that these students enter the workforce two years
earlier.
Even if Mr. Carey had stayed at Radford, graduates of the undergraduate
business administration program there make an average $10,000 less their
first year after graduation than those from George Mason University, though
both schools charge about the same in tuition.
Given these differences in postgraduate earnings, the size of your student
loan is not the only number you should worry about when weighing the
college decision. Will you make enough to pay off your loan? What are your
chances of graduating on time?
In recent months, two tools have been released that allow families to
better compare colleges with respect to return on investment. The U.S.
Education Department's College Scorecard website helps you figure out where
to get "the most bang for your educational buck" by compiling federal data
collected from colleges. Collegerealitycheck.com from the Chronicle of
Higher Education allows for quick and easy comparisons between colleges on
measures families should weigh during their search. It includes
early-career salaries for college graduates from payscale.com, which are
self-reported by users of the site.
Colleges don't like being measured by the earnings of their graduates.
Defining value in such a narrow way, they argue, obscures the broader
benefits of higher education. They point out that first-year salaries often
have no bearing on earnings later in life. It's true that those with
bachelor's degrees typically earn more over a lifetime than those with a
two-year degree, but that's little consolation to those who are discouraged
from going to community colleges and end up dropping out of a four-year
school without a degree.
The salary and graduation data from the states come from state governments
and were analyzed by College Measures, a partnership between the American
Institutes of Research (a research organization) and Matrix Knowledge (a
consulting firm). As the researchers themselves admit, the data would be
more useful if they included more than the first-year salaries of those
graduates who remain in state to work. But improving these tools has been
slow going, largely because the higher-education lobby has fought federal
efforts to create a "unit-record" system that could work across state lines
to link students' educational and employment histories.
For decades, U.S. colleges have promoted the economic benefits of higher
education. But now that they can no longer ride the coattails of the
national averages-which obscure the value of individual schools and make
everyone look good-higher-education leaders suddenly think salary is too
narrow a measure.
Students who pick their major based solely on postgraduation salaries, as
opposed to passion for a field, will in all likelihood struggle in both
school and career. But without salary information, many more students will
make bad choices. They will go deep into debt without ever knowing that
they pursued a degree without a chance at a career or a job to pay off
their loans.
Received on Sat Apr 27 2013 - 23:06:27 EDT
